77 replies to this topic

[fukkinen]

Originally posted by lustigson
All the other manufacturers have other reasons to be there:
...
- BMW: to beat Mercedes
...

That's true!
I remember the 2 page BMW advertising prior to come back to F1 abord of a Williams, showing a Mercedes AMG Sledgehammer against a BMW Serie3 Alpina in Paul Ricard 1971.

Something like:
"From time to time, we tend to meet each other"
"Next time will be Melbourne, Mar 12, 2000".

Then it keeps going in small letters the importance of racing in their car development, similar to Honda.

[Bernd Rosemeyer]

Certainly Toyota. Snce they are in F1 they became the largest selling car brand in the World. Imagine how big they will grow once they start winning.

[Ricardo F1]

Originally posted by PassWind
Advertising do you really think once someone has seen a Ferrari road car there is a need to advertise it, the car says it all. Even a pleb NBA star can work that out.

There are lots of fancy looking sports cars. None have the ring of Ferrari. Ferrari has history, people know what a Ferrari is - add in the performance, prestige and price tag and you have a drooling NBA player. Who will then pimp it out and make it look ****.

[giacomo]

Originally posted by Bernd Rosemeyer
Certainly Toyota. Snce they are in F1 they became the largest selling car brand in the World. Imagine how big they will grow once they start winning.

Toyota did not become the largest selling car brand in the world because of their F1 effort.

Joe Bloggs doesn't even know about Toyota competing in F1. Joe Bloggs knows Ferrari and McLaren, and in the meantime he might even have forgotten about Renault. Not to mention Toyota.

[Sleep]

Originally posted by taran


No, Ferrari transfer 5% of their annual turnover to the racing team and have done so since 1980. In 2007, annual turnover was approximately 1.6 billion euros so the race team gets 80 million.

Obviously, this is not enough

Marlboro has acquired the entire sponsorship portfolio for around $150m (a "normal" title sponsorship for a top team goes for $30m-$70m with the rule of the thumb knowledge that the combined secondary sponsors usually match the title sponsor. Marlboro then "sells" part of the car to other sponsors but that money does not go to Ferrari.

So Ferrari has an "income" of around $270m. Its "official" budget is listed as approximately $450m.
Much of that is the engine budget and other technical areas (gearbox, electronics etc.). Ferrari, Fiat and a host of technical sponsors provide goods and technical assistance which largely explains the difference between $450m and $270m.

It should be mentioned that Fiat used to pick up the racing bills as well (hence the large FIAT stickers in the 70's, 80's and 90's) but that has largely been reduced to providing technical assistance instead since the late 1990's when Fiat was in dire financial difficulties and Ferrari was "officially" divorced from the company.

The start of your post is not true! "Ferrari transfer 5% of their annual turnover to the racing team..."! Are you insane? If Ferrari wouldn't have increased the production of their road cars by almost 25% since the mid 90s they would be where Williams is today, mid grid.

It's fuuny how you almost quote me later in your post by writing Ferrari's current budget is close to $450 million. Yes, almost half comes from Philip Morris but Ferrari actually pay for the rest of their sponsors. Without the road cars they would be in trouble right now. They would be almost dead during Enzo's reign. These days they are saved by the increase in the production. Luca knows they can't increase it anymore...

[V8 Fireworks]

SPYKER! 1 and a bit seasons of excellence

[Timstr11]

Funny,
the poll shows the three most profitable car companies at the bottom:
Toyota, Honda, BMW

[NineOneSeven]

Yeah that is funny. I think it reflects the perception that these companies are making the least from their link to F1. I am talking about the linking of their core product to the spectacle that is F1.

I still think Renault (Ferrari aside) in my mind at least seem to be the most visible with their F1 ties. I think they are followed by Mercedes and Honda.

Honda should take leaf out of Porsche's book and remind everyone who they had driving their cars and bikes. They should make more of their engineering excellence. The Honda NSX developed by a top F1 driver should fall into legend status, but it doesn't because people aren’t even aware of the link. I had to tell a friend about the development of the NSX he owns. He couldn't believe it, and had to double take his car... he appreciated the engineering and the development.

[Mika Mika]

MacLaren make prams and buggies... . And their website is better than McLaren

[Pingguest]

To me only Ferrari makes commercial succes due to their F1 involvement. Other car manufactures, with Renault as the only possible exception, seem to get the opposite effect. Especially Honda and Toyota make themselves look ridiculous to me due to their involvement.

I think in most cases manufactures should only be involved in Formula 1 as an engine supplier. To me Honda, Renault, BMW and Ford/Jaguar had a better image when they were only supplying engines to the privately owned teams.

[Lukin83]

IMHO the F1 connection works the best for expensive, sporty car brands - Mercedes, BMW, etc. Renault and Toyota sell family cars and family cars don't have many things in common with racing (although I've got to admit that Peguot and Citroen gained a lot in WRC, at least in my eyes). So once Toyota would start winning (yeah, I know how it sounds) they should rename their team to Lexus. It could be a story similar to Mercedes. Not sure if Lexus needs it though.

The F1 is also quite good to gain a global recogintion of a brand and/or to put your product on a higher shelf. For example: I would never ever buy Dacia, Kia, Hyundai or any other SsangYong. But what if such an unknown car manufcturer would compete in F1? If I could see they are able to deliver the most sophisticated technology then I would change my mind. Sponsoring football and/or tennis events are totally not convincing for me...

The problem is when you join the competition and you can't win anything, not even a single point. The probability of a failure in F1 is way bigger than the probability of a win.

[taran]

Originally posted by Sleep


The start of your post is not true! "Ferrari transfer 5% of their annual turnover to the racing team..."! Are you insane? If Ferrari wouldn't have increased the production of their road cars by almost 25% since the mid 90s they would be where Williams is today, mid grid.

It's fuuny how you almost quote me later in your post by writing Ferrari's current budget is close to $450 million. Yes, almost half comes from Philip Morris but Ferrari actually pay for the rest of their sponsors. Without the road cars they would be in trouble right now. They would be almost dead during Enzo's reign. These days they are saved by the increase in the production. Luca knows they can't increase it anymore...

I suggest you do some research as everything I have said can be found in numerous publications on Ferrari.

Ferrari originally built road cars to finance his racing cars. This is not a durable business plan and he ended up selling his ailing company. And when I say ailing I mean dead in the water. Fiat, a publicly held company, introduced the 5% rule to prevent all the money going to the race department with the R&D department for the road cars being starved of funds. Fiat itself paid part of the racing budget as a sponsor although much of that was in kind by providing the services of its engineers and facilities.

Ferrari has a turnover of just 1.7 billion euros and a development budget of 250 million euros. This is peanuts compared to development budgets of major manufacturers. And since Ferrari is faced with heavy competition (Lamborghini, Bentley, Audi, Porsche, BMW, Mercedes etc.), it cannot afford to coast on just its name as it did in the late 80's/early 90s. Its cars need to be high-tech, hence the development.

Ferrari no longer builds road cars to go racing, it goes racing to sell road cars. It has share holders to answer to, not a Enzo the Dictator clone with racing on the mind.

FYI, I am not quoting you when I mention the budget estimation of $400-$450m but rather the guestimates of most F1 commentators. And I have no idea what you're on about when you say that Ferrari pays for the rest of their sponsors. Sponsors "pay" for the privilege of sponsoring the car, either in kind or with money. Ferrari does not pay sponsors to be allowed to place their name on their own car. Perhaps you should first study what a sponsor is .
And Ferrari is a special case since it has sold the entire 'car' to Marlboro. Look it up if you don't believe me.

All this means that Ferrari cannot generate sufficient money to go racing at the forefront of F1. It needs powerful sponsors but that is not enough in today's super expensive F1. It also needs Fiat to provide is muscle, both financially and technologically.

[Timstr11]

Originally posted by Pingguest
To me only Ferrari makes commercial succes due to their F1 involvement. Other car manufactures, with Renault as the only possible exception, seem to get the opposite effect. Especially Honda and Toyota make themselves look ridiculous to me due to their involvement.

Did you notice Toyota and Honda have been selling record numbers of cars the past 5-8 years or so?

So much for your 'opposite effect'. :

[taran]

Originally posted by Lukin83
The F1 is also quite good to gain a global recogintion of a brand and/or to put your product on a higher shelf. For example: I would never ever buy Dacia, Kia, Hyundai or any other SsangYong. But what if such an unknown car manufcturer would compete in F1? If I could see they are able to deliver the most sophisticated technology then I would change my mind. Sponsoring football and/or tennis events are totally not convincing for me...

Sponsoring F1 or entering it does wonders for your image and brand recognition but it has been found to be rather slow in penetrating non-racing circles. You have to be in F1 for many seasons before Joe Bloggs knows it if he doesn't care about F1.

Sponsoring soccer means your brand recognition jumps sky-high amongst people interested in soccer, usually people who buy family hatchbacks and saloons. When deciding on a new car, people make a shortlist in their mind of brands. The challenge is getting on that mental shortlist because those not on it aren't even being considered despite the quality of their product. And since the competition in that segment is murderous, getting noticed is all important.

When sponsoring tennis or any other "upscale" sport, the idea is to show the product to an audience who might not otherwise consider your product. Now, they can see it and hopefully start associating it with the kind of people they consider themselves to be. That is why you often see brands not usually considered upscale sponsoring these kinds of events, to get their products in view of the kind of buyers the brand would like to have.

[Suntrek]

Renault, obviously!

With car decorations such as these nothing can go wrong.

[canon1753]

Ford.


Look how much press for years and years they got out of the DFV era. All that for a little bit of money. Best bang for their buck ever.....

Ferrari gets the prize now though and Renault even tries and puts drivers in adverts. Not too bad either.

[Cindy]

I don't know if Honda is really in it for the commercial recognition. It was always to give their engineers a challenge, and it has helped them to develop technology and skills for their customer cars.

Back in the 80s and early 90s it would have been great because they were winners as engine providers. But considering how its been for them last year and mid pack this year, I doubt they want to highlight it yet.

[RiDE]

Originally posted by Ricardo F1
There are lots of fancy looking sports cars. None have the ring of Ferrari. Ferrari has history, people know what a Ferrari is - add in the performance, prestige and price tag and you have a drooling NBA player. Who will then pimp it out and make it look ****.

It's always funny seeing those cars for sale but nobody wants them since their resale value dropped like a rock when they put 10 subwoofers in the car and chrome 22" wheels.

[EvilPhil II]

The answer is.. Mercedes. And has been since 1999. BMW close on their tail now though.

[Rinehart]

Originally posted by EvilPhil II
The answer is.. Mercedes. And has been since 1999. BMW close on their tail now though.

Oh I love it, someone thinks there is an actual 'answer' to the question despite the fact that the effect of a manufacturers involvement in F1 cannot actually be measured.

[fukkinen]

Originally posted by Rinehart


Oh I love it, someone thinks there is an actual 'answer' to the question despite the fact that the effect of a manufacturers involvement in F1 cannot actually be measured.

And how do you think Dr. T convinced BMW to go solo in F1?
Beyond the guarantee that it was fully funded by it's sponsors and Concorde Agreement and BMW Corp. would not put a single Euro into it [that I really doubt bcs of the costs of the Sauber+BMW integration].

In strategic terms, there is the Balanced Scorecard and Burning Platform, etc.
In financial numbers, the marketing guys must have reached a gross number.

[Dolph]

Originally posted by taran


No, Ferrari transfer 5% of their annual turnover to the racing team and have done so since 1980. In 2007, annual turnover was approximately 1.6 billion euros so the race team gets 80 million.

Obviously, this is not enough

Marlboro has acquired the entire sponsorship portfolio for around $150m (a "normal" title sponsorship for a top team goes for $30m-$70m with the rule of the thumb knowledge that the combined secondary sponsors usually match the title sponsor. Marlboro then "sells" part of the car to other sponsors but that money does not go to Ferrari.

So Ferrari has an "income" of around $270m. Its "official" budget is listed as approximately $450m.
Much of that is the engine budget and other technical areas (gearbox, electronics etc.). Ferrari, Fiat and a host of technical sponsors provide goods and technical assistance which largely explains the difference between $450m and $270m.

It should be mentioned that Fiat used to pick up the racing bills as well (hence the large FIAT stickers in the 70's, 80's and 90's) but that has largely been reduced to providing technical assistance instead since the late 1990's when Fiat was in dire financial difficulties and Ferrari was "officially" divorced from the company.

How exatly did you go from $150 M to 270??

[taran]

Originally posted by Dolph


How exatly did you go from $150 M to 270??

Oops.
Marlboro pays $150m for the entire car. Ferrari SpA pays a sum of $80m (5% of its total turnover) to the racing team, hence $150 + $80 = $ 230m and not $270m.

Guess that explains my overdraft

[monaco]

Originally posted by tifosi


I'm not 100% convinced some of the Hollywood celebs or NBA stars could even spell F1, let alone have any clue as to what it is.

.

Probably not all .. but The Iron Man, Robert Downey, Jr., probably knows his Ferrari --

Here's something from a past interview :

We all have our favorite films and performances of the year, but that got us wondering: What are the favorites picks of some Golden Globes winners and nominees?

Robert Downey Jr. got the ball rolling. His favorite? "The Prestige." 'It's like the old film 'The Seven-Per-Cent Solution' - that Sherlock Holmes movie - it was so not what you expected. To me, it was a Ferrari engine of a script, and Christian Bale is always exciting and innovative. The scene where Hugh Jackman is dying and then has a page and a half monologue. . . . How do you deliver a speech like that? But Jackman handled it.

Some comparison by one of Hollywood's most admired acting talents ;)

[fukkinen]

F1 companies attracts best people.

posted by amardeep:
http://www.reuters.c...annel=0&sp=true

Takeo Fukui, CEO of Honda
"But it's the lack of an F1 win that sticks in the craw of the 63-year-old former engineer, who joined Honda precisely because it was the first Japanese automaker to enter the world's premier motor sport."

[Rinehart]

Originally posted by fukkinen

And how do you think Dr. T convinced BMW to go solo in F1?
Beyond the guarantee that it was fully funded by it's sponsors and Concorde Agreement and BMW Corp. would not put a single Euro into it [that I really doubt bcs of the costs of the Sauber+BMW integration].

In strategic terms, there is the Balanced Scorecard and Burning Platform, etc.
In financial numbers, the marketing guys must have reached a gross number.

Brand strategy is not all measurable my numbers, my friend. For example, BMW's participation in F1 may have reinforced in some peoples minds that BMW is a more tecnologically advanced brand than before, but these people might be 16 years old, or they might already be BMW owners, or a huge company might do a lease deal with BMW for 500 new cars, but the fleet director never watched an F1 race in his life. You see? BMW don't measure their participation in F1 by how many cars they sell, because brand architecture is a constant thing. The only relevance of the cars they sell is if they can justify being in F1 or not...

[fukkinen]

Originally posted by Rinehart


Brand strategy is not all measurable my numbers, my friend. For example, BMW's participation in F1 may have reinforced in some peoples minds that BMW is a more tecnologically advanced brand than before, but these people might be 16 years old, or they might already be BMW owners, or a huge company might do a lease deal with BMW for 500 new cars, but the fleet director never watched an F1 race in his life. You see? BMW don't measure their participation in F1 by how many cars they sell, because brand architecture is a constant thing. The only relevance of the cars they sell is if they can justify being in F1 or not...

And?

[Ruf]

I reckon that Renault got the most of it. Ferrari don't need advertising. Aside that, I suspect it's more a reverse logic involved. Something like "if Mercedes(Honda) is in it, we BMW(Toyota) can't afford to be outside".